Or giving (potentially) every block a craftable active/inactive variant?

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Fair enough. In that case, I really do think that the addition of an extra bit on each block would be a good thing. It only needs to be an "Is toggled" check. The main problem I see with this, though, is that it has a different problem in function. It can be just as much a pain to make certain that a wall does not go under certain blocks, and can affect the look of things.

Sadly, the only alternative I can think of to address both does not fit here, as it would require a device rather than a wire (that being a placeable item which can store two blocks/walls and toggles between them).

I'm not sure what you're describing here? If walls were under something other than a toggle-able block, blue wire would behave like normal wire. A device allowing multiple blocks and toggling between them would be interesting but that seems a bit different- and probably belongs in a new thread

Oh oh oh. I see, making a door with blocks. Yes you would have to leave the space behind the blocks without walls. But to the player trying this, and forgetting to remove the walls behind the blocks, it would be immediately apparent what was going on, and they would see that they have to remove the walls. This wouldn't be an issue aesthetically either as the blocks would conceal the wall-less space. Seems like a minor special-case issue that isn't really that much of an issue, but thanks for pointing that out. <3

@Joshyswag: Is it to do with the ratio at which walls are produced from blocks/bricks? because this has already been addressed:

If a block is flipped to an inactive state via blue wire, and then removed (with a hammer) you will get a block. If a wall is switched to a block via blue wire, and then removed (with a pickaxe) you will get a wall. (This would require blocks switched with blue wire to have one extra data value with the original block id, and unless you decided to fill your whole map with blue wire this wouldn't mean too much for save sizes, or this [extra measure] could be skipped but that would allow block duping due to the 4wall:1block crafting ratio.)